Break Even Analysis Financial Math Worksheet Page 8
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10b) What is the margin of safety in units and as a percentage of sales value?
c) If Mild Ltd wanted to make a target profit of £34,000 how many units of Product D
would it need to produce and sell?
Activity 11 - Hay-on-Wye
The following information relates to one period for Product V, which is manufactured by Hay-
on-Wye Ltd.
Selling Price per unit
£80
Variable Costs per unit
£25
Budgeted Fixed Costs
£110,000
Budgeted Sales
2,500 units
a) What is the margin of safety in units?
b) What is the MOS in terms of sales revenue?
c) If Hay-on Wye wanted to make a target (expected) profit of £12,000 how many units
of Product V would it need to make & sell?
Activity 12
Your company makes and sells a single product, which has a Selling Price of £30 per unit.
The unit Variable Cost of sales is £17. Budgeted sales for the year are 80,000 units.
Budgeted Fixed costs for the year are £650,000. Target (expected) profit is £200,000
Calculate the:
a) break-even point (in units)
b) margin of safety as a percentage of budgeted sales
c) number of units to produce and sell to achieve the target profit
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